Committee of Public Accounts

Press Notice No. 5 of Session 2003-04, dated 3 February 2004


Mr Edward Leigh MP, Chairman of the Committee of Public Accounts, said today it is ridiculous that £100 million of taxpayers' money spent on the Warm Front scheme each year is going to those who are not fuel poor, and that it's time DEFRA targeted its efforts at those most in need.

Mr Leigh was speaking as the Committee published its 5th Report of this Session, which examined the current eligibility criteria for the Warm Front Scheme and the targeting of grants; the range of measures it provides; and the Scheme's impact on fuel poverty. The Scheme is a major component of the Government's UK Fuel Poverty Strategy, which aims to eliminate fuel poverty in England by 2016, and to eliminate it in vulnerable groups by 2010 as far as practicable. Since the Warm Front Scheme began in June 2000, replacing the Home Energy Efficiency Scheme, DEFRA has spent on average £150 million each year, around 75% of which was spent on grants for a range of insulation and heating measures to vulnerable people to improve the energy efficiency of their homes.

The Committee found that much of the public funding of £150 million for Warm Front annually does not help those most in need. Currently only around a third of grants made under the Warm Front Scheme help the fuel poor, and a third or more fuel poor households are not eligible for Warm Front grants. Fuel poverty is a factor of personal incomes, fuel prices and the energy efficiency of homes. The Department uses certain qualifying benefits as an indicator of income but these do not provide a good match in identifying the fuel poor. To improve the Scheme's effectiveness, the Department should establish eligibility criteria which best identify low income groups, for example those on means tested benefits. Benefit health checks, visits and local networks such as doctors' surgeries and shops may provide a better way of identifying those most in need of assistance and helping them apply for a grant. The Department should also consider creating a discretionary fund through which the most fuel poor could be prioritised, assisted quickly and with sufficient measures to make a real difference.

The Department currently has no eligibility criteria reflecting the energy efficiency of the home. It should concentrate on resources on homes with low energy efficiency but which can be significantly improved to reduce occupiers' fuel costs.

8% of all grants have been for two energy efficient light bulbs only, and 20% of all jobs have resulted in light bulbs or draught proofing only. £14 million was spent on providing light bulbs and draught proofing to households in a sample year, though they have limited impact on energy efficiency and hence fuel poverty. The Department should reduce such expenditure, and use the money saved to help those households most in need. The Department's Public Service Agreement target measures numbers of households assisted and should be revised to better measure the impact of the Scheme in reducing fuel poverty and on the fuel efficiency of the homes assisted.

Some Scheme rules result in poor value for money by requiring installation of more expensive and less efficient options for some claimants than alternative solutions available. The current Scheme rules require like for like replacement of central heating systems and boilers even when an alternative would be cheaper and more effective for the household. Nor can inefficient systems be replaced and repaired unless they are broken at the time of the Warm Front survey, even though the defective equipment may be condemned later. The Department should remove the requirement for like for like replacements, and create more flexibility within the Scheme rules to provide assistance where systems are in a poor and potentially dangerous condition but still operate. The Department should also undertake research to develop new solutions for hard to treat homes such as those off the gas network or with solid walls.

Delays in installing measures under the Warm Front Scheme continue to occur with over 50% of all jobs exceeding target times. These delays may partly reflect a shortage of suitably qualified engineers. But the Department should also work with Scheme Managers and suppliers to prioritise those cases most likely to benefit.

The Department should also seek to assess the wider impact of the Warm Front Scheme by researching whether the Scheme is moving people out of fuel poverty. Such an exercise should inform the planned scheme redesign in 2005, and in particular identify whether the Scheme will contribute fully to achieving the aim of eliminating fuel poverty in vulnerable groups by 2010.

Mr Leigh said today:

"With the recent cold spell our thoughts turn once again to the fuel poor, those on low incomes who cannot afford to properly heat or insulate their homes. It is ridiculous that £100 million of the £150 million of taxpayers' money spent on the Warm Front scheme each year is going to those who are not fuel poor. And a third of fuel poor households are not even eligible for the grants available. It's time DEFRA targeted its efforts at those most in need and made a real impact. It should start by addressing its misleading measurement of success and diversion of resources into activities such as the installation of a couple of energy efficient light bulbs."

Click here to view Report